Pipavav Shipyard- Cancellation of Order

Pipavav Shipyard lost an order worth $ 36 million.

The announcement on the BSE, which came today, January 8 2010, is worded as:
Pipavav Shipyard Ltd has informed BSE that Setaf sas of France, one of the customers of the Company has cancelled the order for one 74,500 DWT Panamax Vessel with aggregate contract value of US$ 36.00 million.

This vessel was to have been delivered in 2009, but was delayed. The installation of the Gollath crane was delayed on account of delay in issue of visas for expatriate Chinese workmen.

Putting things into perspective, Pipavav Shipyard came out with an IPO in September last year. In the red herring prospectus, they had mentioned the following:

are engaged in arbitration with Setaf s.a.s. (“Setaf”) regarding whether it has the right to cancel one or more of four firm order agreements for Panamax bulk-carriers of 74,500 DWT each, such orders having an aggregate value of US$ 144 million (Rs. 6,893 million), but we are also engaged in simultaneous discussions with Setaf in respect of the refund guarantees relating to these orders and are seeking to preserve these orders

If the vessel had to be delivered in 2009, then Pipavav Shipyard is certainly hiding something more. Also, will this hit the stock or not? That would be interesting to see on Monday.